Serial Bond Defaults Of State-owned Enterprises:Factor Exploration And Countermeasures

Since the beginning of its establishment,China's bond market has entered a stage of preliminary development.Compared with other countries,China's bond market has always had more strict access policies,and there are many rigid requirements on bond issuing subjects and issuing interest rates,which also makes China's bond market have no bond default events within 20 years after its establishment.In 2014,Shanghai chaori bond defaulted for the first time,which officially declared that China's bond market had entered the "era of default".But only in the following year "11 tianwei MTN2" bond defaults,become the first domestic bonds substantial default of state-owned enterprises and past bond investors for state-owned enterprises has held bonds issued by the rigid concept of honour and thinks that there are implicit guarantee bonds issued by state-owned enterprises,when an enterprise is unable to pay bond principal and interest relevant government departments will also help in a timely manner,there will be no debt default.However,since the first defaults in the bond market,the number of such defaults has accelerated,especially in some industries where overcapacity and supply and demand are prominent.Partly as a result the different controlled private enterprises bond default,in recent years,the state-owned enterprise bonds of serial default many times a wake-up call for is not yet mature bond market,has also asked bond investors risk awareness,strengthen the ability to recognize,bond issuers in the before and after the issuance of bonds to consider the feasibility of external financing,short-term and long-term solvency.Sichuan coal industry group co.,LTD.(hereinafter referred to as sichuan coal group)had its first substantial bond default in June 2016.In the following two years,as the bonds matured one after another,the defaults became more frequent.After 2010 countries constantly accelerate the pace of industry structural adjustment,is undoubtedly a shuffle of traditional coal state-owned enterprises,many large coal enterprises have reduced the size of the traditional coal production,but sichuan coal group still continue the operation strategy of inherent,continually expand the scale of coal production,and take advantage of state-owned enterprises credit constantly external financing,without considering their solvency and environment factors are public offering of billions of dollars in debt.The financial situation of sichuan coal group has not been improved due to the industry's continuous downturn and other reasons.In 2012,it even made a loss for the first time.Since then,the loss continued to increase for four consecutive years.On the one hand,bond default causes enterprises with poor cash flow ability to face greater unknown risks.The continuous crisis in the capital chain not only affects the repayment schedule of corporate bonds,but also is closely related to the normal operation of enterprises.On the other hand,the serious overcapacity in the main coal business,the decline in the company's profitability and the long-term improvement of the company has made it difficult to change the tense situation of capital chain rupture.In this article,through detailed combing the serial events of default,sichuan coal group from two aspects of internal factors and external factors of state-owned enterprises explore the deep reason of a serial bond default,when the internal cause analysis,qualitative analysis,from the perspective of corporate governance for the use of financial statement analysis,the dupont analysis,contrast analysis method for quantitative analysis of the industry,and then introduces the sichuan coal group after the debt default relevant coping styles,and to summarize the merit and shortcoming,the last choice regulation,rating,companies,investors from multiple aspects of the targeted serial bonds default corresponding preventive measures are put forward.It is hoped that it can help market investors to break the inherent understanding of the rigid payment of state-owned enterprise bonds,help enterprises to find reasonable measures to solve the debt burden and avoid serial bond defaults,and provide new ideas for the healthy and sustainable development of China's bond market and the disposal of state-owned enterprise bonds after default.